Starting up a business involves lots of decision such as trading names, make-up of the organisation (Sole Trader, Partnership or Limited Companies, etc. ) and deciding what is your market proposition. However, amongst the many and varied things that you need to think about are:
- Understanding the difference between Profit and Turnover. A former colleague of mine from the business sector had a sign on his desk which read “Turnover is vanity -Profit is sanity” . You would not be the business man to confuse activity with profit. For example, if you buy 1000 melons for £1 each and sell them for £1.50 but when you factor in your costs it actually costs you £1.60 per melon-selling every single Fruit be great for turnover but wouldn’t increase your profit.
- Registering with the Tax Authorities and putting money aside to pay taxes. Only 2 things certain in life are ‘death and taxes. Tax authorities the world over will require you to post returns and pay your taxes when due. Start with the good habit of setting aside money in an interest earning account to pay for your tax. Many viable business have been forced in bankruptcy because they had insufficient funds set aside to pay their tax liabilities when they became due.
- Insurances (such as Public Liability Insurance) Insurances such as Employers liability are usually a legal requirement however often your customers will mandate that you hold insurances to protect them against being sued as a result of accidents caused by you or your employees. Premiums for insurances can vary widely so ensure that you shop around for the ‘best’ deal.
- Recognise that running a business is a whole different skills set. For instance, as a corporate trainer I understood probably all there is to know about Training Analysis , Design and delivery however when it came to running my own Training business I was shockingly ignorant about things crucial to my success such as marketing, accounts, and negotiating. So, no matter how strong your underlying skills as unless you learn and learn quickly how to run a business successfully -your new business venture won’t be around long.
- Balancing business and private life . When I worked for the Bank within the small business sector I was often shocked to hear of the immense number of hours these business owner put in. When a business is new it requires a huge amount of dedication and hard work to make it successful. When you work for someone else you expect paid holidays and sick leave however I often encountered Entrepreneurs who hadn’t taken a holiday in years so considering how you can balance the demands of your new business with a home and family life needs to be considered before you launch into the world of starting and growing a business.